How do you freeze or reset a lattice?
I went into edit mode


You should scale the lattice only in Object mode to encompass your object.

And yes - it doesn't need to be a cube. When you're ready with x/y/z scaling do not Apply object transform (scale) to the lattice at all. It will result in the same outcome.

Scaling it in edit mode is applying deformation on the object as expected, in your case - scaling it up/down.